Why in News

The fact that an Indian Prime Minister is making a visit for the first time in 25 years since we established full diplomatic ties is significant and termed historic in itself. The focus of the visit signifies 25th anniversary of diplomatic ties has opened a new chapter in the Indo-Israel bonhomie.

Advantage Israel

1. Israel, led by strong growth of private consumption, low inflation, rising labor force participation, a positive investors’ climate because of low interest rates, natural gas finds and responsible fiscal policies, has a lot to offer.
2. A modern economy like Israel goes well with our own flagship programmes like Make in India. Indian companies with their engineering and scale and Israeli companies with their innovation and technology can together stimulate our domestic manufacturing sector, particularly in defense.
3. Israel, at the same time, is considered as the most advanced country in SW Asia and the Middle East in economic and industrial development.
4. It is a developed country having a highly skilled and educated workforce. So, developing relations between the two is important.
5. Israel has become one of the foremost technology superpowers in areas such as rainwater harvesting, use of oceanic water and using that for irrigation in the most dry land.
6. Israel has transitioned from a water-deficit state to a water-surplus state, and has pioneered the water desalination technique, something that’s absolutely significant in the era of climate change, rapid loss of fresh water bodies, and rise in seawater levels.
7. Israel achieved self -sufficiency in food production despite having 50% barren Land. Its 3.7% of workforce produces 97% of its own food. India could well follow its path by using techniques from it like Drip Irrigation, Post-Harvest technology, Food Tissue culture, Plastic Culture , Vertical gardens etc.

Background of Indo- Israel relations

1. Since India established full diplomatic ties with Israel in 1992, relations between the two countries have grown at an astonishing pace, covering a wide range of issues from defence and homeland security, to agriculture and water management, and now education and even outer space.
2. The formal acknowledgement of the relationship at the highest levels leaving behind hesitations of history and India’s de-hyphenation of its Israel and Palestine policies for the first time (and taking the related course-correction measures such as rethinking India’s voting choices on anti-Israel resolutions at the UN and dropping the demand for East Jerusalem as capital of a future Palestinian state), is the turning point in the relations of both countries going forward.

Key areas of Camaraderie, cooperation and coordination

Hinged on defence, intelligence-sharing, counter-terrorism on one side and cooperation in water harvesting and agriculture on the other, there are a number of avenues in which India-Israel ties would be key to the emerging global order.

• Economic Engagement: Israel, led by strong growth of private consumption, low inflation, rising labor force participation, a positive investors’ climate because of low interest rates, natural gas finds and responsible fiscal policies, has a lot to offer.  Policy initiatives on ease of doing business and the opening of defense, construction and pharma sectors have added to India’s attractiveness as an investment destination.
• Defense collaboration: The India-Israel equation in defense has acquired strategic dimensions but there is need and opportunity to make it “more broad-based” through production and manufacturing partnerships. Israeli defense industries are well inclined towards joint ventures to give a boost to the ‘Make in India’ campaign.
• Innovation and Entrepreneurship Culture: Israel embodies a culture of entrepreneurship highlighted by the power of innovation, global leadership in R&D spending and venture capital investment. A joint innovation and research and development fund can work wonders.

A country that has no automotive industry for example, and yet they are the R&D centre for autonomous cars (self-driving) in the world.

• Agricultural Partnership and Water Conservation: Arid land technology, biotechnology and a joint action plan to research India specific and export-oriented seeds deserve attention. Israel has tackled its rain deficiency by developing technology solutions for waste water management, purification, desalination techniques and water reuse in agriculture and industry. The Israeli dairy industry with its proven know-how and design, technology and genetic material can revolutionize the dairy industry in India.
• Medical and Pharma sector cooperation: Medical technologies and devices could be the next growth areas for collaboration.
• Diaspora potential: Another important factor in bilateral ties will be the Indian diaspora. Most Jewish Indians, about 80,000, have all moved here, and there are just about 4,000-5,000 left in India.
• Academia-Industry- government Connect: We have to learn from their universities, how they have technology transfer companies based right on their campuses, who help convert theory into useful products in a very short period of time.
• Counter-Terrorism and Intelligence Sharing: India and Israel are boosting up the counter-terrorism cooperation and sharing real-time intelligence on issues crucial to national security.
• Military and Strategic Ties: Israel is the second-largest source of defense equipment for India, after Russia. Arms trade between the two nations reached almost $600 million in 2016. India has purchased Barak I missiles, 3 Phalcon AWACS, and Israeli spike anti-tank missiles from Israel. Israel is developing Barak 8 missile for Indian Navy and IAF and plans to purchase 2 more Phalcon AWACS are in progress.
• Space Collaboration: In 2002, India and Israel signed a cooperative agreement promoting space collaboration. India has successfully launched TecSAR and RISAT-2 radar imaging satellites of Israelfrom PSLV of ISRO.

Sticky Points in the Relations

1. Bilateral Trade and investment still below potential: From just $200 million in 1992, bilateral trade (excluding defense) peaked at about $5 billion in 2012 but since then it has dropped to about $4 billion. Also, bilateral trade has not diversified much—diamonds and chemicals still make up for the large chunk of the pie.
2. Private Sector still finding feet: Indian companies like Sun Pharma and ATG, a specialty tyre-maker, have big interests in Israel. But perhaps unsurprisingly, the Chinese are streets ahead of us in bilateral trade and their companies are investing heavily in Israel’s cutting-edge start-ups.
3. Connectivity between two countries still poor with just one direct flight from Mumbai 3 times a week and no direct flights from Delhi.
4. Historical retrenchment: India’s consistent support for a sovereign, independent, viable and united Palestinian state with East Jerusalem as its capital, living within secure and recognized borders, side by side and at peace with Israel and Pro-Arab stance has been a sticky point.
5. Limited People to People ties and cultural differences: Israelis and Indian approach business differently and often find it difficult to get on the same page. Though formal ties were established in 1992, but the ideological divide resurfaces time and again.

Way forward

1. Investments to boost tourism, education and cultural ties and building bridges with the Indian diaspora in Israel can help significantly in this context. Indeed, these are the low-hanging fruits in the bilateral relationship that can be plucked right away.
2. Taking cues of Israel’s industry-academia ecosystem, its innovation and start up culture and the state of art cutting edge technology across sectors; India can build mutual collaborations for present and future development.
3. Tapping each other’s potential should be the imperative in the new “Strategic Partnership” to truly make “India-Israel is a match made in heaven”